Home prices rise at fastest pace since 2006

WASHINGTON – U.S. home prices rose in August from a year earlier at the fastest pace since February 2006. But the price gains slowed in many cities from July, a sign that the spike in prices over the past year may have peaked.

The Standard & Poor’s/Case-Shiller 20-city home price index rose 12.8 percent over the 12 months ending in August. That’s up from 12.4 percent in July from a year earlier. All 20 cities showed year-over-year gains.

However, a measure of month-over-month prices for the 20 cities rose just 1.3 percent in August. That’s down from a 1.8 percent month-over-month gain in July. And 16 of the 20 cities reported more modest price increases in August than in July.

Greater demand and a tighter supply of homes for sale have helped drive prices higher over the past year. But over the summer, mortgage rates jumped from their record lows. And weaker job growth is also discouraging potential home buyers.